Remittance crosses $18b before FY20 ends

For the first time, remittance inflow to the country has crossed $18 billion in a fiscal year despite a recent fall owing to the Covid-19 pandemic.

According to data provided by the Bangladesh Bank, from July 1 last year to June 28 this year, Bangladeshis expatriate  sent home $18.02 billion (9.80 percent growth from that of the same period of the previous year). 

The upward trend in remittance inflow is attributed to a budget declaration of 2 percent incentive on inward remittance for the current fiscal year, said an official of the central bank. 

The government allocated Tk3,060 crore remittance incentive for the current fiscal year.

In FY2018-19, the country received $16.41 billion in remittance. The figure was $14.98 billion in the previous fiscal.  

According to the budget proposal for the forthcoming FY2020-21, the government is sticking to 2 percent incentive on inward remittance.

Currently, there are over 1.02 crore Bangladeshis working in 174 countries across the world. 

In FY2019-20, Prime Minister Sheikh Hasina announced a 2 percent incentive on money remitted by expatriate Bangladeshis. The objectives were to mitigate the burden of increased expenses in sending foreign remittance and to encourage remitting money through legal channels.

On June 11 this year, Finance Minister AHM Mustafa Kamal in his budget speech said, "During the current fiscal year remittance grew significantly thanks to the announcement of the incentive. I, therefore, propose continuing this facility in the next fiscal year as well."

The Bangladesh Bank's data show remittances worth $16.36 billion arrived in the country in the July-May period of this fiscal year. The figure is 8.72 percent higher than that of the same period of the previous fiscal. 

In the first 28 days of this month, the country received $1.66 billion in remittance, a senior official of the Bangladesh Bank told The Business Standard.

Meanwhile, Bangladesh's forex reserve stood at $35 billion on Wednesday (June 23) thanks to the growing remittance and the foreign aid inflow. 

On Monday, the reserve increased to $35.76 billion for adding remittance. 

However, experts say the growth of remittance and forex reserve will not sustain as it is not real remittance.

Ahsan H Mansur, executive director of the Policy Research Institute said, "The remittance is not the recent income of our migrant workers. It is their savings. Now they started to send it home because they may have to come back within a short time. In Middle-Eastern countries, where oil price has fallen drastically, many migrant workers have had to lose their jobs."

Incentive has helped to boost inward remittance this year but it is unlikely that the growth will sustain next year as many migrant workers have lost their jobs and returned to the country amid the pandemic.